In 2014, the Competition Agency of Georgia was established as an independent body. The main goal of the Agency is to ensure a fair and free competitive environment in the country. The authority of the Competition Agency is defined by the Law of Georgia on Competition and the Statute of the Agency.

The Competition Agency employs 43 people and is funded from the state budget. In 2019, the agency was funded by GEL 2.2 million from the budget. In 2020, the same funding is envisaged.

In 2014-2019, the Competition Agency completed studies of 25 markets of goods and services. 14 studies revealed certain violations.

Out of 14 violations, 9 were about restricting competition by the state authorities, mainly in public procurement. In 4 cases the facts of unfair competition by economic agents were revealed and one case was about competition restricting agreement.

In most of the cases market studies carried out by the Competition Agency were based on the received complaints from various companies. At its own initiative, the Agency conducted 5 studies.

The Competition Agency could attract high public interest by three market studies and monitoring. One such example was a study of 2018 when the Prime Minister of Georgia, Mamuka Bakhtadze, instructed the Competition Agency to determine the reasons of increased prices of bread. For over a year now, the Agency has not been able to find real reasons of the price increase and whether bread suppliers violated any law. 

The second high-profile case was a study of petroleum products market. In 2014, the Competition Agency began to study this market, with the aim of finding possible anti-competition agreements between the firms. In July 2015, the Competition Agency completed the study and fined eight companies by a total of GEL 55 million. The penalized companies appealed to the courts, which have annulled the imposed fines due to a lack of sufficient evidences. The case was returned to the Competition Agency for re-examination. In 2018, the Agency re-examined the case and found fewer violations committed by economic agents. As a result, total fine of GEL 55 million was reduced to GEL 3 million.

In the third case, there was a strange action made by the Competition Agency. In 2016, the Agency completed monitoring of filtered and unfiltered cigarette market and published a report stating that there was no violation of the Competition Law in this market. At the same time, there was a court dispute between two players in this market. JSC Tbilisi Tobacco sued Philip Morris Georgia LLC for violating the competition legislation. The judge did not attach the conclusion of the Competition Agency to the case for unjustified reasons. JSC Tbilisi Tobacco won the dispute in Tbilisi City Court. Doubts about possible corruption were expressed against the unjustified decision. Interestingly, the Competition Agency's report was initially uploaded on the Agency's website, but was later deleted for unknown reasons and now it is still absent.

Introduction

Free and fair market competition is considered a very important factor for any country's economic development. Competition law serves the purpose of enhancing market competition in Georgia. The Competition Agency is a public institution, which is responsible for the implementation of this law.

The Competition Agency is an independent Legal Entity of Public Law (LEPL) accountable to the Prime Minister of Georgia and the public. First, in 1996, the Anti-monopoly Service was established based on a presidential decree. After the Rose Revolution, this Service was abolished and in 2005-2010, it has been a subdivision of the Ministry of Economy. In 2010, based on a government decree, this institution was re-established as a LEPL and was renamed the Free Trade and Competition Agency. In 2012, this institution has been merged with the State Procurement Agency.

In 2014, as a result of an amendment to the Law of Georgia on Free Trade and Competition, the Competition Agency was re-established as a separate and independent body. The Association Agreement with the European Union was one of the reasons for this decision as protection of competition is considered an important priority. With this change, the existing Competition and Public Procurement Agency was divided into two independent legal entities of public law: the State Procurement Agency and the Competition Agency.

The Competition Agency provides employment for 43 people. In 2015-2019, this number did not change.

The agency is funded from the state budget. In 2014, it did not receive full annual funding from the budget, as it was established as a separate institution only in April and received GEL 510,095 from the budget. In 2015, the Agency received GEL 1.9 million from the state budget. The funding has increased in the following years and reached GEL 2.2 million in 2020.

Although this agency has been operating for 5 years and is funded by the state budget, Georgian public has little information about its activities and from time to time, there are some doubts and questions about the conditions of unequal competition in the market and the risks of artificially created oligopolies.

That is why we tried to review the work of this agency and raise public awareness of its competences, also we tried to find out how transparent its activities are and what specific cases it has studied. In the study, we analyzed relevant regulations of the Law on Competition and the Statute of the Agency. Review of case studies and statistics are mainly based on the annual reports published by the Agency and the information sent by this institution. We thank the Agency for providing feedback and cooperation.

Data source: The Competition Agency

Chapter I. Competences of the Competition Agency

The authority of the Competition Agency is defined by the Law of Georgia on Competition and the Statute of the Agency. In addition, the Agency is guided by the Constitution of Georgia, international agreements and other legal acts in carrying out its activities. Compliance with the decisions, instructions and other legal acts adopted by the Agency is mandatory for central government institutions, the authorities of the Autonomous Republics and local self-government bodies and economic agents. The statute and structure of the Agency are approved by the Government of Georgia, and its source of funding is the state budget of Georgia and other revenues provided for by the legislation of Georgia. No later than May 1 of each year, the Agency prepares and submits to the Prime Minister and Georgian public an annual report about the work done and the overview of the competition environment in Georgian commodity and service markets.

The powers of the Agency are determined by Article 18 of chapter 4 of the Law of Georgia on Competition. These competences can be considered in two ways:

• With respect to economic agent
• With respect to the state government, the government of the Autonomous Republic or local self-government body.

In the first case, the Agency is authorized to conduct investigation of a case on its own initiative, based on submitted appeal and / or complaint. In the course of the proceedings, the Agency is entitled to review relevant documents related to the activities of an economic agent or to request information about legal, organizational and economic relations of an economic agent or other interested party.

In case of inadmissibility of documents or requested information, the Agency may request information from economic agents through courts. In addition, the agency is authorized to impose an administrative penalty on an economic agent in case of failure to provide information related to the case.

At any stage of investigation of a case, if necessary, the Agency may invite relevant persons to receive explanations from them and arrange meetings with them. In addition, for the purpose of investigation, the Agency, after getting a court approval, is authorized to inspect the economic agent involved in the case on the ground. It may also require an economic agent to ensure compliance with the law and to impose a fine in case of violation of the requirements of the law.

The Agency may conduct a study to determine the scale of unobserved (unregistered) economy to determine exact market share needed for having a dominant market position. At the same time, it can provide appropriate authorities with a request to forcefully divide a particular enterprise, if it is technically possible. It can also use other measures stemmed from the competition policy if an economic agent with a dominant position repeatedly violates Georgian competition legislation.

The Agency is authorized to raise the issue of responsibility of the management of an economic agent violating the legislation of Georgia with the relevant bodies and apply to the court with a motion to temporarily suspend a certain action of the economic agent.

As for the powers of the Agency in relation to the central government, authorities of the Autonomous Republics or local self-government bodies, they include a right to request documentation related to a possible violation of the law. In addition, the Agency is entitled to submit a well-grounded written decision and relevant recommendations to a state institution, which made an illegal decision. The Agency can also require from the mentioned institution to cancel the illegal decision, and in case of noncompliance, it can ask relevant supervisory authorities for further actions.

The Agency is authorized to submit mandatory proposals and / or recommendations for consideration to a relevant state body for improvement of competition environment. The Agency may also address the Government of Georgia with a report or recommendation if an assistance provided by the State significantly restricts competition.

Within its competences, the Agency may also issue a recommendatory explanation regarding the application of Georgian competition legislation.

1. Expected amendments to the Law on Competition

In June 2019, Roman Kakulia, MP, initiated the amendments to the Law of Georgia on Competition, which have not yet been discussed in the Parliament. The purpose of the changes is to strengthen legal, economic and technical capabilities of the Competition Agency, which should ensure a proper implementation of competition policy. The amendments mainly concern the following issues:

• In all administrative proceedings conducted by the Competition Agency, it will be mandatory for companies to provide information, which is mandatory only during the ongoing study today;
• Cooperation between the Agency and sectorial regulatory bodies will be improved and their competences will be clearly separated;
• Mechanisms for enforcing control of market concentration will be improved;
• Procedural issues of administrative proceedings carried out by state authorities, authorities of the Autonomous Republic and local self-governments and powers of the Agency in relation to these institutions will be improved;
• In case of a justified fact of unfair competition, the Law does not provide for any sanctions that can be imposed by the Agency. It can only assess the fact of violation. Moreover, there is no sanction prescribed in case of recurrence of the violation. This situation will be improved.
• Today, the chairman of the Agency is the only person who formally makes decisions. According to the amendments, in order to increase impartiality and independence of the Agency, it is proposed to give a right to make decisions to a collegial body. In addition, study process and decision making will be separated.

Chapter II. Activities carried out by the Competition Agency

Since the Competition Agency was established as an independent body in 2014, it has started study of 5 cases and monitoring of one market that year. In 2015-2018, the Competition Agency completed 25 market studies of various goods and services. 14 studies have revealed certain violations. The most studies - 10 - were conducted in 2015. After that the Agency has been carrying out 5 studies per year.

Data source: The Competition Agency

1.Cases studied in 2015

In 2015, a total of 6 studies were launched based on three appeals, one complaint and two own initiatives. The rest of the cases started in 2014 and were continued in 2015.

The following studies of 10 commodity markets, which started in 2014-2015, ended in 2015:

• Four studies were about alleged abuse of dominant position - no violations were found.
• Three studies were about competition restricting agreement (Cartel) - one violation was found.
• Three studies were about restriction of competition by the state - violations were found in all three cases.

1.1. Cases studied based on the received appeals

1.1.1. Study of Tskaltubo thermal water market based on the appeal of JSC Health (Order #31 - March 4, 2015)

Subject of the dispute: Alleged abuse of a dominant position in the market of thermal -mineral waters of Tskaltubo.

Decision: No violation was found.

1.1.2. Study based on the appeal of GeorgianTrans Expedition Poti LLC (Order #40 - March 30, 2015)

Subject of the dispute: Alleged violation of the article on inadmissibility of restriction of competition by state authorities, authorities of the Autonomous Republic and local self-government bodies in the market of cargo services in Poti.

Decision: Competition restricting action by the LEPL Revenue Service against the applicant was found. More specifically:

• Hindering business activities of GeorgianTrans Expedition Poti LLC
• Giving a preference and creating a monopoly position for Inland Container Terminal LLC in the market of cargo services.

1.1.3. Study based on the appeal of Optimalgroup + LLC (Order #45 - April 22, 2015)

Subject of the dispute: Alleged violation of the article on inadmissibility of restriction of competition by state authorities, the authorities of the Autonomous Republic and local self-government bodies in public tenders.

Decision: Violation of competition legislation was found. In public tenders announced for purchasing design / construction / engineering services the procurer requested a document of compatibility, which could be given only by one specific company. Such actions created conditions that substantially limit competition and free pricing

1.1.4. Study based on the appeal of Intertechnics LLC (Order #113 - August 7, 2015)

Subject of the dispute: Alleged violation of the article on inadmissibility of restriction of competition by state authorities, the authorities of the Autonomous Republic and local self-government bodies in public tenders.

Decision: Violation of competition legislation was found. The following procurer organizations – the City Halls of Abasha, Aspindza and Khashuri and N(N)LE Terjola Cleaning Service restricted market competition and free pricing by giving a monopoly power to certain economic agents.

1.1.5. Study based on the appeal of Globalagro - the Association of Bread Producers (Order #148, October 12, 2015)

Subject of dispute: Alleged abuse of a dominant position by Agrosystems LLC, Carmen K LLC, and Carmen LLC (interconnected companies).

Decision: No violation was found.

1.1.6. Study of motor gas market based on the appeal of Consumers Rights Protection Society (Order #162 - October 30, 2015)

Subject of the dispute: Alleged violation of the article on restricting competition by collective agreement, decision or action, which could be a result of setting the agreed retail gas prices by gas retailors.

Decision: No violation was found.

1.2. Cases studied by the initiative of the Competition Agency

1.2.1. Study of petroleum products market

The Competition Agency initiated a study of market for petroleum products (gasoline, diesel, kerosene). In the course of study, two relevant markets were identified from petroleum products market:

A) Motor fuel market b) aviation fuel market.

1.2.1.1. Study of motor fuel market (gasoline, diesel) (Order #81 - July 14, 2015)

Decision: Violation of Article 7 of the Law of Georgia on Competition (agreed action) was found. The violation specifically included: direct or indirect determination of purchase or sale prices, or other trade terms, restrictions on production, markets, technological development or investment, distribution of market shares or supply sources by customer, territorial or other categories.

1.2.1.2. Study of aviation fuel market (Order #131 - September 11, 2015)

Decision: No violation was found.

1.2.2. Study of an alleged abuse of a dominant position by economic agents within the territory of Batumi Oil Terminal LLC and compliance of the activities of oil terminals with the competition legislation in the ports of Georgia (Order #202 - December 30, 2015)

Decision: No violation was found.

2.Cases studied in 2016

In 2016, the Competition Agency completed studies of five markets of goods and services. Among them, two studies were started in 2015, while 3 were started and ended in 2016.

Out of five completed studies:

• One was launched by the initiative of the Agency;
• Two were started based on complaints submitted to the Agency;
• Two were started based on appeals.

According to decisions of the Agency, violations of competition legislation were confirmed in two out of five cases.

In 2016, the Agency completed monitoring of filtered and unfiltered cigarette market and published a report stating that there was no violation of the Competition Law in this market.

At the same time, there was a dispute between two players of this market. JSC Tbilisi Tobacco sued Philip Morris Georgia LLC for violating the competition legislation. The judge did not attach the conclusion of the Competition Agency to the case for unjustified reasons. JSC Tbilisi Tobacco won the dispute in Tbilisi City Court. Doubts about possible corruption were expressed against the unjustified court decision. Interestingly, the Competition Agency's report was initially uploaded on the Agency's website, but was later deleted for unknown reasons and now it is still absent.

2.1. Cases studied based on the received complaints

2.1.1. Study of the issue of tobacco sales in free trade points

Subject of the dispute: Alleged violation of requirements of Article 6 of the Law of Georgia on Competition (Abuse of a dominant position) by JSC Tbilisi Tobacco.

Decision: No violation was found. According to the Agency, it is not possible for an economic agent who does not have a dominant position to abuse it.

2.1.2. Study of an alleged fact of unfair competition in medical services market

Subject of the dispute: Alleged violation of Article 11³ of the Law of Georgia on Competition (unfair competition) by Institute of Medical Parasitology and Tropical Medicine LLC.

Decision: Violation was found.

2.2. Cases studied based on the received appeals

2.2.1. Study of an alleged restriction of market competition by the LEPL State Medical Regulatory Agency

Subject of the dispute: LEPL State Medical Regulatory Agency allegedly violated one of the articles of the Law of Georgia on Competition on inadmissibility of restriction of competition. According to the plaintiff, the Regulatory Agency has interpreted the Law of Georgia on Drugs and Pharmaceutical Activities in such a way that it restricted competition. In particular, the Regulatory Agency deliberately restricted the "parallel import" of medical drugs, which includes importing drugs with different packaging and labeling.

Decision: According to the decision of the Competition Agency, the study did not reveal any unequivocal evidence that the Regulatory Agency deliberately restricted parallel import of drugs. However, in the course of this study, one other violation still was found.

2.2.2. Study based on the appeal of an insurance company Unison

Subject of the dispute: Alleged violation of one of the articles of the Law of Georgia on Competition - inadmissibility of restriction competition by state authorities. This case concerned public tenders for purchasing health insurance announced by the Georgian Post, the Georgian National Communications Commission and the Mountain Resorts Development Company. According to the plaintiff, high qualification requirements - the experience of companies, the volume of attracted / generated premiums and the number of provider clinics – set for bidder insurance companies were discriminatory and significantly reduced the number of potential competitors.

Decision: The Competition Agency found that the Georgian Post, the Georgian National Communications Commission and the Mountain Resorts Development Company are not subjects to Article 10 of the Competition Law; consequently, they could not violate this law. However, the Agency clarified that the essence of such actions is against Article 10 of the Competition Law.

2.3. Cases studied by the initiative of the Competition Agency

2.3.1. Study of the wheat flour market

The subject of the dispute: Alleged violation of the article on restricting competition by collective agreement, decision or action committed by the members of Globalagro, the Association of Wheat and Bread Producers of Georgia.

Decision: According to the Competition Agency, wheat flour market openness, entry of powerful companies to the market and active price competition make it possible to say that this market is competitive and there is no evidence that the members of Globalagro made competition hindering agreements.

3.Cases studied in 2017

In 2017, the Competition Agency completed studies of five markets of goods and services.

• One study was initiated by the Agency;
• Four studies were conducted based on submitted complaints.

According to the decisions of the Agency, violations of competition legislation were confirmed in two out of five cases.

3.1. Cases studied based on the received complaints

3.1.1. Poti port case study

The subject of the dispute: Alleged violation of Article 6 of the Law of Georgia on Competition (Abuse of a dominant position) by JSC Corporation Poti Seaport (hereinafter - Poti Port). The complaint concerned an order issued by Poti Port that should have been enforced from July 1, 2016, and which set unified tariffs in its territory on all types of services like cargo unloading, transportation and warehousing.  

Decision: According to the decision of the Agency made on April 21, 2017, it was found that the newly offered tariff scheme would be against the coopetition legislation. However, the abuse of a dominant position by Poti Port was not confirmed, since these tariffs have not been enforced.

3.1.2. Study based on the complaint of iTechnics

Subject of the dispute: Alleged violation of article 7 (restricting competition by collective agreement, decision or action) and article 11³ (unfair actions) of the Law on Competition committed by three economic agents – iPlus LLC, Apple City LLC and iStyle LLC. These companies sell products of Apple Inc. (iPhone, MacBook and their accessories).

Decision: The Competition Agency did not find a violation of article 7 by the mentioned economic agents since their similar market behavior in fact was logical. Moreover, the plaintiff failed to provide evidences of the agreement between the defendants. As for Article 11³, the Agency found a violation in one of the episodes discussed in the case.

3.1.3. Study based on the complaint of an insurance company Unison

Subject of the dispute: Alleged non-compliance of public tender requirements with competition legislation. Procurers requested such guarantees from bidders that could have been given only by commercial banks. Therefore, there could have been a possible violation of Article 10 of the Law of Georgia on Competition (inadmissibility of restriction of competition by state authorities).

Decision: According to the Competition Agency, both banks and insurance companies have a right to issue bank guarantees in accordance with the civil legislation of Georgia. Therefore, in public tenders requesting bank guarantees issued only by commercial banks restricts competition and is a violation of Article 10 of the Law.

3.1.4. Study of outdoor advertising activities in Batumi

Subject of the dispute: Alleged violation of Article 10 of the Law of Georgia on Competition (inadmissibility of restriction of competition by state authorities). The plaintiff complained about extension of outdoor advertising permit to his competitor without auction.

Decision: The Agency found that relevant legislation did not provide for the possibility of extending the validity of the permit. Thus, this action could not be considered an exception allowed by the Article 10 of the Competition Law. Therefore, this action led to a restriction of market competition by violating Article 10 (e) of the Law (a decision that creates a monopoly for an economic agent).

3.2. Cases studied by the initiative of the Competition Agency

3.2.1. Study of market for transportation of public school students

Subject of the dispute: Alleged violation of Article 7 of the Law of Georgia on Competition (restricting competition by collective agreement, decision or action) by V Com LLC (B&B LLC), Nishi LLC, Time Service LLC and My GPS LLC. The study also discussed alleged violation of Article 10 of the Law of Georgia on Competition (inadmissibility of restriction of competition by state authorities, the authorities of the Autonomous Republic and local self-government bodies) committed by the Ministry of Education and Science of Georgia. The study was based on the information and relevant audit report sent by the State Audit Office.

Decision: The Agency, in its order of 23 June 2017, did not find a violation of Article 7 by economic agents that allegedly made a competition-restricting agreement. The study also found that My GPS LLC was restricted from participating in a public tender, which is a violation of Article 10 (c) of the Law (prohibition, suspension and / or otherwise obstruction of the entrepreneurial activity and independence of an economic agent).

4.Cases studied in 2018

In 2018, the Competition Agency completed studies of five markets of goods and services.

Out of five completed studies:

• One was launched based on a court decision;
• Four were started based on complaints submitted to the Agency.

According to the decisions of the Agency, violations of competition legislation were confirmed in four out of five cases.

4.1. Study based on a court decision

4.1.1. Study of motor fuel market

The subject of the dispute: General Courts of Georgia annulled the order of the Chairman of the Competition Agency dated July 14, 2015 and the case was returned to the Agency for reconsideration.

Decision: The original decision of the Agency on agreed prices between economic agents in accordance with franchising / sublicense agreements remained unchanged. By this decision, the Agency found a violation of Article 7 (a) of the Law committed by Rompetrol Georgia LLC., Lukoil Georgia LLC and their partner companies. This article implies direct or indirect agreement on setting of purchase or sale prices or other trading conditions between economic agents. Moreover, the Agency found a violation of article 7 (1) (c) of the Law (market redistribution according to market levels (import / wholesale / retail)) committed by five companies (SOCAR, Lukoil, Rompetrol, Gulf and Wissol).

4.2. Cases studied based on the received complaint

4.2.1. Study based on the complaint of Design House LLC

The subject of the dispute: The study concerned the alleged violation of Article 11³ of the Law by Dimplex Georgia LLC and Dna LLC, which prohibits unscrupulous actions from the side of economic agents. According to the complaint, the respondent economic agents were spreading statements against Design House LLC through a social network, urging consumers not to buy products belonging to this company and discrediting the name and reputation of both the company and the director.

Decision: The Agency considered this action as smearing competitor's reputation, which in turn constitutes a violation of Article 11³ (2) (c) of the Law.

4.2.2. Study based on the complaint of Citroen Georgia LLC about public procurement of motor vehicles

The subject of the dispute: Alleged violation of Article 7 of the Law committed by Strada Motors LLC, Iberia Auto LLC, GT Motors LLC during public procurement of motor vehicles. This action implies competition-restricting agreement, decision and agreed action.

Decision: No violation was found.

4.2.3. Study based on the complaint of an insurance company Unison

The subject of the dispute: Alleged non-compliance of public tender requirements with competition legislation. Procurers requested such guarantees from bidders that could have been given only by commercial banks. Therefore, there could have been a possible violation of Article 10 of the Law of Georgia on Competition (inadmissibility of restriction of competition by state authorities).

Decision: According to the Competition Agency, both banks and insurance companies have a right to issue bank guarantees in accordance with the civil legislation of Georgia. Therefore, in public tenders requesting bank guarantees issued only by commercial banks restricts competition and is a violation of Article 10 of the Law.

4.2.4. Study based on the complaint of Dazga LLC

The subject of the dispute: Alleged violation of Article 11³ of the Law by Solway LLC, which prohibits unscrupulous actions from the side of economic agents.

Decision: The Agency found that Solway LLC had violated Article 11³ (2) (a) of the Law, which implies spreading of information (including improper, unscrupulous, unreliable or clearly false advertising) about certain goods through any means of communication, which misleads consumers and encourages certain economic action.   

5.High-profile cases of the Agency

When we speak about the activities of the agency, we should mention high profile and highly exposed cases. One such an example is a study focused on finding reasons for increase in the prices of bread. In 2018, the Prime Minister of Georgia, Mamuka Bakhtadze, instructed the Competition Agency to determine the reasons of increased prices of bread by 5-10 tetri. According to the Prime Minister, this may have been related to unfair competition.  For almost a year now, the Agency has not been able to determine why the prices of bread in Georgia has risen in December, 2018. In July, 2019, the Agency stated it was monitoring the bread and wheat market and processing the information, but the fact is that the study has been not finished yet.

The second high-profile case is a study of petroleum products market. On November 12, 2014, the Competition Agency, due to high public interest, began to study this market, with the aim of finding possible anti-competition agreements between the firms. The Agency studied companies' actions over a three-year period before July 2015 (before the decision was made). Also, the Agency researched market situation in 2004-2015, which served the purpose of observing dynamics of the market.

By the order #81 of July 14, 2015, the Chairman of the Competition Agency made a decision to complete the market study. According to the Agency, the enquiry revealed violations of Article 7 (1) (a), (b) and (c) of the Law of Georgia on Competition. As a result, economic agents - Lukoil Georgia LLC., JSC Wissol Petroleum Georgia, Rompetrol Georgia LLC., SOCAR Georgia Petroleum LLC., San Petroleum Georgia LLC., Binuli 1 LLC., ETI LLC and L Oil LLC were fined by a total of GEL 55 million, according to Article 33 of the Law. Moreover, for violating Article 7 (1) (a) of the Law of Georgia on Competition fines of GEL 200 were imposed on Lukoil Georgia LLC, Rompetrol Georgia LLC and 23 economic agents operating in accordance with franchising / sublicense agreements with them.

The relevant sub-paragraphs of the first part of Article 7 includes the following violations:

1. Direct or indirect determination (fixing) of purchase or sale prices or other trade conditions;
2. Restriction of production, markets, technological development or investment;
3. Distribution of markets or supply sources by customer, territorial or other category.

Most of the fined companies appealed against the sanctions imposed by the Competition Agency.

On October 24, 2016, the Administrative Cases Panel of the Tbilisi City Court rejected a lawsuit of SOCAR Georgia Petroleum LLC and upheld the July 14, 2015 order of the Chairman of the Competition Agency. The Administrative Cases Panel of the Tbilisi City Court also rejected a lawsuit of Lukoil Georgia LLC against the Competition Agency. The oil companies continued their disputes in the courts of higher instance.

According to the decision of the Tbilisi Court of Appeals of April 27, 2017, the lawsuit of SOCAR Georgia Petroleum was satisfied. According to the Court of Appeals, there were insufficient evidences and the fine imposed on SOCAR Georgia Petroleum was annulled. The case was returned to the Competition Agency for re-examination. For its part, the decision of the Court of Appeals was appealed by the Agency to the Supreme Court, but the Supreme Court ruled that the Agency's claim was inadmissible and upheld the decision of the Court of Appeals. The motivational part of the Supreme Court's decision emphasizes that the circumstances relevant to the case have not been investigated, which is a function of the administrative body (the Competition Agency).

By the order of the Chairman of the Competition Agency of Georgia of January 17, 2018, the Agency started a study of the case to re-examine and evaluate the circumstances to ensure enforcement of the decisions made by the courts of Georgia. In May 2018, the Competition Agency published the results of the re-examination. According to the Agency, as a result of the analysis of the materials of administrative proceedings obtained during the study, the Agency found violation of Article 7 (c) of the Law of Georgia on Competition committed by SOCAR Georgia Petroleum LLC, Rompetrol Georgia LLC, San Petroleum Georgia LLC, Wissol Petroleum Georgia LLC and Lukoil Georgia. As a result, these economic agents were fined by up to GEL 3 million. Therefore, total fine of GEL 55 million was reduced to GEL 3 million.

In the third case, there was a strange action made by the Competition Agency. In 2016, the Agency completed monitoring of filtered and unfiltered cigarette market and published a report stating that there was no violation of the Competition Law in this market. At the same time, there was a court dispute between two players in this market. JSC Tbilisi Tobacco sued Philip Morris Georgia LLC for violating the competition legislation. The judge did not attach the conclusion of the Competition Agency to the case for unjustified reasons. JSC Tbilisi Tobacco won the dispute in Tbilisi City Court. Doubts about possible corruption were expressed against the unjustified decision. Interestingly, the Competition Agency's report was initially uploaded on the Agency's website, but was later deleted for unknown reasons and now it is still absent.

The report was prepared with the financial support of the Ministry of Foreign Affairs of the Kingdom of Norway